Sector movers: Lloyds lifts banks
The retail sector is having a tough day with many shares on sale at knockdown prices.
JP Morgan has cut its price target on B&Q owner Kingfisher to 128p from 135p, saying its fourth quarter sales fell short of expectations.
Kingfisher's like-for-like sales, which it reported yesterday, fell by 0.5%, rather than rising by 1% as JPM had forecast, due to falls of 9.1% in Italy and 7.5% China, the broker noted.
It maintains its 'underweight' rating on the shares.
JPM also noted that Kingfisher's net debt of around £1.6bn was higher than its forecast of £1.46bn, and cited this as one of the reasons for the reduced price target.
In the software sector, Sage is suffering following poor results in the US from accounting software giant Intuit. Gresham Computing brings some cheer to the sector, however, after news of a "substantial" contract win for a treasury management solution with a major customer in Australia.
"We are delighted to have been awarded this seven figure contract against stiff competition," said CEO Andrew Walton-Green.
The implementation is expected to be completed during 2008.
Another leading bank - this time Lloyds TSB - has announced its results without "frightening the horses" with the size of its sub-prime related mark-downs.
Lloyds TSB traded higher Friday as full year underlying pre-tax profit rose 6%, just ahead of expectations, while analysts said an increase in write-downs was still pretty modest.
Underlying profit before tax for the 12 months to 31 December rose to £3.92bn from £3.71bn a year earlier, despite an increase in the charge related to the global credit crisis to £280m from the £200m flagged last December.
Pre-tax profit fell 6% though to £4bn from £4.25bn, largely as a result of "significant adverse policyholder interests volatility", said the UK's fifth-biggest bank.
Impairment losses grew 15% to £1.8bn, including an increase of £264m to £572m at Wholesale and International Banking, although there was a £14m, or 1%, fall to £1.22bn at UK Retail Banking.
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The full year dividend, which for many years was maintained despite scepticism from the markets, rises to 35.9p from 34.2p in 2006.
Top performing sectors so far today
Industrial Metals 7,517.30 +2.64%
Forestry & Paper 4,025.80 +2.12%
Chemicals 5,301.00 +0.80%
Banks 7,943.20 +0.76%
Electronic & Electrical Equipment 1,876.10 +0.74%
Bottom performing sectors so far today
General Retailers 1,610.10 -2.53%
Software & Computer Services 451.20 -2.36%
Household Goods 6,458.30 -2.09%
Travel & Leisure 4,949.50 -1.88%
Automobiles & Parts 4,233.10 -1.83%
